I’m unemployed, but I don’t want to see the Legislature get rid of the state equalization property tax, even though it would lower my home’s property taxes. Why? Because the state needs the money more than I do to offset a $3 billion deficit and keep government services running at least at a base level.
When Gov. Janet Napolitano and the Legislature agreed to suspend the equalization property tax in June 2006, the state had a $1 billion surplus. But it was evident at that time that real estate had peaked and the economy had slowed significantly. The state’s leading indicators in May 2006 had plummeted by the largest monthly amount since ASU began tracking the data. However, before the ink was dry on the budget, Republican leadership began pushing to repeal the tax and have supported legislation to do that every year since then. Repealing the equalization tax will only make the state more dependent on sales taxes, which account for 52 percent of Arizona’s revenue and growing.
Sales tax revenue is regressive and highly volatile. To those voting for this: Do you really want the state’s revenue to be more susceptible to downturns like we’re in now?
When the state took over funding of school construction 10 years ago – replacing a system that favored richer school districts through taxing local property owners – it was known that the equalization tax would bring in $250 million a year to help pay for new schools and repair old schools. By permanently eliminating that revenue, it will put a bigger strain on the state’s general fund. Republicans were in control of the Legislature then, and now the party that claims it is trying to be fiscally responsible is being fiscally irresponsible.
Some people say that letting this tax come back is the same as raising taxes. No it isn’t, because the Legislature would need a two-thirds majority vote to actually raise taxes. And all it will take to get rid of the tax is a simple majority trying to appease special interests – saving SRP an estimated $20 million annually – and those who don’t like state government and want to see it de-funded.
Apparently, the Republicans are the party of “no.” But in this case, “no” means “no government.”